Avoiding M&A Spend Management Mistakes

ThomasNet's blog has a good write-up summarizing some of the more important points from Accenture's recent M&A study that looks at sourcing and supply chain impact on M&A success (and failure). According to the post, "Supply chain executives are involved in early planning in only about half of M&A deals. By waiting until after a deal closes to identify a strategy for merging supply chain operations, companies are missing an opportunity to jumpstart their savings." But involving procurement and operations leaders in deals is not just about identifying cost synergies -- identifying potential areas of supply risk is also essential. In this regard, the post also quotes a Line 56 article which notes that, "The speed at which a newly merged team can drive toward a more efficient supply base depends on how quickly it identifies the overlaps, and the vulnerabilities. This is also critical to execute on the economies of scale."

Unfortunately, just having the right Spend Management M&A due diligence team is not enough (or having a set of crack consultants at your disposals). The speed with which analysis has to occur -- often across dozens or hundreds of systems and data types -- goes beyond what Excel and Access can handle. So before getting a seat at the M&A table, make sure you've got a technology -- or set of technologies -- available to enable the types of analyses that are necessary to make the most informed deal decisions. As further background reading on Spend Management and M&A, I'd also suggest checking out one of my previous posts on the subject.

Jason Busch

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